January brought us another new low in inventory in Bend and Redmond since starting this project in late 2009. We of course expect lower inventory in winter and higher in summer which the first two Bend charts show very well. What is worth noting is all categories show a long-term trend of inventory decline for over 3 years.
Reminder: the charts and tables do not include bare land, multi-family homes, time shares or mobile homes without land.
The summer inventory peaks and the winter valleys continue to be lower than the year before. In short, we should expect inventory to increase in spring but the $64,000 question remains, will it be another summer peak below the previous summer??? From today’s vantage point, inventory increase would have to be extremely steep to exceed last year’s summer peak. If I were a gambler, my bet would be inventory this summer will be lower than last creating strong support for price appreciation.
The other big question is that darn shadow inventory. Just ran across December article in the Bend Bulletin that sheds a little light on the subject:
http://www.oregonlive.com/front-porch/index.ssf/2012/12/legislature_supreme_court_face.html
We’ve noticed too the distressed seller is less willing or inclined to sell, holding on tight in hopes of some kind of resolution. At the same time, lenders have been slower to initiate the foreclosure process due to government actions (see link) and partly through the realization that allowing the homeowner to stay in the home is a cheaper way to manage their inventory while metering it out over a longer period of time, reducing distressed inventory counts which in turn lends price support to the market.
In summary it appears we are headed toward another solid year for Real Estate prices however, many big questions remain unanswered, local, nationally and internationally adding just enough uncertainty to keep us all in suspense. One recent development is the FHA’s decision to make mortgage insurance payments stick for the life of the loan. There are of course plenty of other influences that will directly or indirectly affect our market. I’ll continue to view all predictions as just wild guesses, bets, speculation, or educated guesses including my own, until some semblance of consistency and predictability materialize.
To see a graphic illustration of this trend view the charts and tables: http://www.centralorproperty.com/Central,ORTrends.html
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